The Impact of Open-Market Share Repurchases on Long-Term Stock Returns: Evidence from the Taiwanese Market

Nai-Hui Su and Chan-Jane Lin

Emerging Markets Finance and Trade, 2012, vol. 48, issue 0, 200-229

Abstract: This study examines long-term stock returns following open-market share repurchases of listed firms in Taiwan. The empirical results based on event-time cumulative abnormal returns (CARs) and buy-and-hold abnormal returns (BHARs) show that announcing firms do not experience significant positive long-term return relative to the control firms. Moreover, using the calendar-time portfolio approach, we find the abnormal returns are significantly negative over twelve, twenty-four, and thirty-six months, suggesting stocks of firms that repurchase their shares are underperformed in the postannouncement period. The implication from our results is that in Taiwan, share repurchases are mainly used to stabilize stock price during a market downturn rather than to signal a firm's future prospects.

Keywords: buy-and-hold abnormal returns; Fama-French three-factor model; long-term performance; share repurchases (search for similar items in EconPapers)
Date: 2012
References: Add references at CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
http://mesharpe.metapress.com/link.asp?target=contribution&id=E24448R7V6765W5G (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:mes:emfitr:v:48:y:2012:i:0:p:200-229

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/MREE20

Access Statistics for this article

More articles in Emerging Markets Finance and Trade from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().